DWP's new universal credit 'safeguards' include paying the rent itself

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DWP's new universal credit 'safeguards' include paying the rent itself

The Department for Work and Pensions is stepping up its efforts to keep tenant arrears down under universal credit (UC) including, it seems, by paying the rent itself.

The government is desperate for UC to be a success and is doing everything in its power to ensure social landlords are not put into financial difficulty by rapidly rising arrears as a result of direct payments.

In recent months, the DWP has been working closely with housing providers and the National Housing Federation to ensure rent payments are safeguarded under the new benefits system, which is currently being rolled out across the country.

But according to the Labour MP Frank Field these 'safeguards' have been taken one step further.

Field claims he has seen official figures from the DWP that show the department is making payments direct to landlords for more than half the 70 participants in a 'pathfinder' pilot project in Warrington, Cheshire, and the number could rise to 45. Average rent arrears for those in the pilot are said to have doubled to £942.

Field said the move was particularly worrying because the pilots have involved only single people and couples with relatively straightforward circumstances.

Meanwhile, in its latest direct payments guidance, the DWP has published the full range of safguards that are now available to social landlords. And they include the possibilty of UC payments being made to the landlord from the beginning - on a case by case basis.

It states: "When a claim for universal credit is made it will be decided if a claimant needs support with budgeting and this may include putting in place an alternative payment arrangement where significant support needs are identified. In these cases DWP staff will consider information from tenants and landlords before taking a decision."

The DWP has also confirmed that tenants who are already in arrears when they make a claim for UC can have their rent paid to their landlord from the start.

The guidance states: "This will depend on the claimant’s circumstances. When a universal credit claim is made, DWP will work with the claimant and landlord to decide if budgeting support or 'alternative payment arrangement' is required, based on a number of factors. All cases will be looked at on an individual basis."

The DWP had previously said that 'alternative payment arrangements' could be put in place when arrears reached an equivalent of two months’ rent (the ‘trigger point’).

It has also set up a rent arrears hotline (0345 600 0723) that landlords can use when a tenant builds up a minimum of one's month arrears - to kickstart the 'budgeting support process' and an 'emergency' email address: uc.servicecentrehousing@dwp.gsi.gov.uk

And a 'simple to use' application form has now been created to make an 'alternative payment arrangement' request.

The DWP also says it is "exploring" increasing the rate at which deductions can be made from UC payments when a tenant gets into arrears.

The guidance states: "Rent and service charges for the property the tenant is currently living in are included in the list of deductions that can be made from a universal credit payment. Furthermore, DWP is currently exploring increasing the rate at which deductions can be made.

"Landlords can phone DWP to request a ‘third party deduction’ for rent arrears when they reach the equivalent of two months’ rent."

Despite the increasing number of caveats to the direct payment approach, the DWP insists the majority of claimants will still receive their UC as a lump sum into their bank account each month.

Commenting on the new guidance, a DWP spokesman said: "We discuss budgeting support with ALL claimants of UC. But we also have safeguards in place with clear arrangements where payments for vulnerable people can be made direct to landlords. Where an alternative payment arrangement is appropriate, and we have the necessary details, it will be paid within five days.

"78% of claimants from UC pathfinder areas feel confident about their ability to budget with monthly payments, and we have increased budgeting support for claimants under UC."

Commenting on the figures released by Frank Field, a DWP spokesman said that rent arrears "aren't new" and that around 50% of housing association tenants in England were in arrears before UC was introduced.

He said: "These suggestions are based on a small sample of claimants presenting a skewed picture. The reality is rent arrears aren't new under universal credit and it is inaccurate to suggest otherwise. Recent research shows that around 50% of housing association tenants in England were in arrears before UC was introduced.

"Furthermore, the National Housing Federation has acknowledged that we have delivered real service improvements with increased support to help people adjust to budgeting and more protection for landlords. With the vast majority of people saying they are coping well with direct payments.

"Universal credit is already making work pay as we roll it out in a careful and controlled way. It is transforming people’s lives in a growing number of areas, including 39 Jobcentres, and we have started taking claims from couples too. By the end of this year, around one in eight Jobcentres will offer universal credit."